Major banking crash exercise

[Imsayingnothing]

Imagine you have a friend who is high up in a financial institution who tells you that in ten days time from now there is going to be a major banking crash worldwide.

The banks will bring in a credit freeze, meaning all bank account cards and credit cards will be frozen. You will not be able to use switch, cashless payments, online payments or even take cash out of a cash machine. All accounts will be frozen.

How would you prepare for this?

I always keep some cash at home, about £200 but I should imagine it wouldn't be much use in that situation. I think I would buy plenty of tinned food as it has a long shelf life. Other than that I really don't know. I loved the response about going on a 9 day spending spree and burying cash in the garden 😂 sounds like a good plan.

@Imsayingnothing

Hi all it was just a sort of general idea on how people might best prepare for it if they knew for a sort time in advance.

I actually started thinking about it after reading this. www.google.com/amp/s/www.wsj.com/amp/articles/fed-to-test-ability-of-largest-banks-to-weather-a-recession-11613139891

Then I thought back to 2007-2008 when the bank's could literally only either pay everyone's direct debits or everyone's card payments, they did not have enough to cover both, only at that stage the general public didn't know. Then I thought about the bail ins and bail outs. Also generally just wondered what people would do.

This isn't something to worry about - I really can't see anything like the scenario described in the OP ever happening. The regulations on banks are so much stricter now than they were in 2008 and are much more conscious of what's called contagion where issues with one banks causes issues in another. For example, money in retail bank accounts (ie bank accounts for people and small businesses) is now ringfenced, so banks have to keep it separate from their investment banking activities and the risks don't cross over. The Bank of England also makes banks test how they would withstand different conditions. It's called stress testing www.bankofengland.co.uk/stress-testing This includes things like what they would do if they couldn't access IT systems etc as well. Banks are much better prepared for failure now, so the government wouldn't need to bail them out.

If there was 10 days notice everyone would rush to draw out their cash and the banks would run out very quickly.
There would also be an increase in burglaries because people were keeping cash at home.
In reality you probably wouldn’t get 10 days notice.

What would you be spending your cash on? If there was a major banking system crash one of the shops would have stock or be able to pay their staff.